Greenspan the Great!

townhall.com ^ | July 17, 2002 | Jude Wanniski

[n-tres-ted]

When I tuned in Tuesday morning to catch Fed Chairman Alan Greenspan's testimony before Senate Banking, right off the bat I watched you gurgling about how he was the greatest central banker in the history of civilization!! The reason you chose this moment to smother him with wet kisses on his nether body parts, you said, was because you were leaving the Senate this year and probably would not have the privilege of genuflecting before him again. I turned green and looked around for a bucket.

[n-tres-ted]

Go to the source URL and read this entire memo to Senator Gramm, describing the grave shortcomings of monetary policy under Greenspan. Deflation since 1996 has crushed farmers, telecoms and anyone who has to use debt for business purposes. Jude Wanniski says it better than I, so use the links he posts in his article to see more.

[n-tres-ted]

With the current frenzy over the collapse of the financial markets, shouldn't there be a little more enlightenment about monetary policy? It just might be that Congress is getting ready to hang the wrong guy(s). LOL

[n-tres-ted]

BTTT

[stlrocket]

Alan Greenspan has single handedly done more damage to the economy than any single individual in history. His refusal to act during the election cycle until he knew who was going to become President, is the most direct cause for the financial problems we have today. The economy was tanking then! He was afraid to point that out as the Dems would have had to admit there was a REAL problem.

He gambled with our financial stability and WE LOST!

Fire the Moron TODAY!

ALAN GREENSPAN AND HIS FINANCIAL ADVISOR

[steve50]

We lost, but the big boys made out quite well. You don't actually believe it's Greenspans job to protect the American citizen, do you. If he tried that the republicans and democrats would hang him

[n-tres-ted]

How is it possible that the Senate could be unanimous in declaring CEO obfuscation a federal crime punishable by as much as 25 years in the slammer, and at the same time declare Mr. Greenspan the financial genius of all central bankers? Seems to me there is a disconnect in there somewhere.

[stlrocket]

Steve - Sadly, you may be right! Scary isn't it.

[JoeSchem]

Seems to me there is a disconnect in there somewhere.

We are in a deep recession. Either Greenspan is a monetarist and monetarism doesn't work, or Greenspan is not a monetarist.

[steve50]

They can make it a death penalty crime and nobody will be worried. Somebody has to get charges pressed and that just don't happen.
If they start trying to put perps in jail the offshore money laundrying banks come into play, nobody wants any light on that subject.

[n-tres-ted]

I am not an economist and will not pretend to be. But I will try to pass along Jude Wanniski's analysis, which is persuasive to me. Jude says monetarism does not work as espoused by Milton Friedman, because it assumes an artificial level of growth for the economy that is translated into growth in the money supply. The Fed is presently populated by monetarists and Keynesians, who have no means of guiding their controls on monetary liquidity and instead simply follow the market in setting interest rates.

JW proposes that monetary liquidity is best determined by the market as it decides how much money is needed for business ventures. If risks or taxes are so high that people do not want to invest money in business, the money usually flows to havens such as gold or other commodities. If more money is needed for business ventures, the price of gold will fall unless the central bank issues more money. So JW urges that the Fed should use the gold price as a guide to know when to circulate more dollars, and when to soak up the excess in order to prevent inflation. JW shows that we have had severe deflation since 1996, as reflected in the slide in the price of gold. He has been advising for some time that the Fed should provide additional liquidity until gold is at $350 per ounce, and then hold it steady. As it is, the increasing dollar value has crushed debtors such as the telecom companies, farmers, and anyone who borrows to do business.

[n-tres-ted]

bttt